Question 1

What is the correct term for an inflation caused by a decrease in AS and accompanied by a decrease in employment and real output?

Accepted Answer

A) Demand pull inflation 
B) Crowding out effect 
C) Cost push inflation 
D) Depreciation 
A) Demand pull inflation 
B) Crowding out effect 
C) Cost push inflation 
D) Depreciation

Question 2

The medium run aggregate supply (MRAS) is affected by labor, capital availability, technological capability, and wage rate.

Accepted Answer

A) True 
B) False 
A) True 
B) False

Question 3

One of the limitations of GDP indices is that they do not take ________ into account.

Accepted Answer

A) Wealth distribution 
B) Gross mixed income 
C) Manufacturing base 
D) Export deficits 
A) Wealth distribution 
B) Gross mixed income 
C) Manufacturing base 
D) Export deficits

Question 4

What is the depreciation of the dollar most likely to do?

Accepted Answer

A) Increase imports 
B) Decrease imports 
C) Increase exports 
D) Decrease exports 
A) Increase imports 
B) Decrease imports 
C) Increase exports 
D) Decrease exports

Question 5

Why does specialization lead to increased output of products?

Accepted Answer

A) People have the opportunity to try many different jobs 
B) People have the opportunity to become increasingly better (and faster) at one particular job 
C) People always enjoy their individual jobs. 
D) People receive highly specialized training by experts 
A) People have the opportunity to try many different jobs 
B) People have the opportunity to become increasingly better (and faster) at one particular job 
C) People always enjoy their individual jobs. 
D) People receive highly specialized training by experts

Question 6

All of the following are approaches to calculate a country's GDP except:

Accepted Answer

A) Product 
B) Income 
C) Expenditure 
D) Imports 
A) Product 
B) Income 
C) Expenditure 
D) Imports

Question 7

What is the name for the special account that is used to make sure that the two sides of the BOP really do balance?

Accepted Answer

A) Current account balance 
B) Net capital inflows 
C) Statistical discrepancy 
D) Capital account balance 
A) Current account balance 
B) Net capital inflows 
C) Statistical discrepancy 
D) Capital account balance

Question 8

If the MPC is 0.7, what is the marginal propensity to save?
A))5
B))1
C))3
D)None of the above

Accepted Answer

If the MPC is 0.7, the marginal propensi

Question 9

True or False:
Having a fractional reserve banking system means that the central bank holds a specific fraction of GDP on reserve at all times.

Accepted Answer

A) True 
B) False 
A) True 
B) False

Question 10

What is the correct formula for the money multiplier?
A)(Required reserve ratio)/(total variable cost)
B)[1 (required reserve ratio)]/(marginal cost)
C)[1-(MPC)]/required reserve ratio
D)1/(required reserve ratio)

Accepted Answer

The correct formula for the money multip

Question 11

Which of the following is the correct term for the simple act of giving one thing up for another?

Accepted Answer

A) Opportunity cost 
B) Profit motive 
C) Trade-off 
D) Command 
A) Opportunity cost 
B) Profit motive 
C) Trade-off 
D) Command

Question 12

If a government devises a plan to increase the amount of money that is spent on national infrastructure like bridges and roads, what is this called?

Accepted Answer

A) A fiscal policy 
B) A governmental policy 
C) A federal policy 
D) A multiplier 
A) A fiscal policy 
B) A governmental policy 
C) A federal policy 
D) A multiplier

Question 13

When calculating unemployment figures in a given population, economists count those:

Accepted Answer

A) Looking for paid work 
B) Early retirees seeking extra income 
C) Discouraged after long searches 
D) Incarcerated in prisons 
A) Looking for paid work 
B) Early retirees seeking extra income 
C) Discouraged after long searches 
D) Incarcerated in prisons

Question 14

The Federal Reserve is a private institution that was authorized by the United States government in the early 20th century to regulate the quantity of money in the economy. The following are the functions of the Federal Reserve except:

Accepted Answer

A) Lending to other banks 
B) Imposing trade tariffs 
C) Regulating private banking 
D) Controlling the supply of money 
A) Lending to other banks 
B) Imposing trade tariffs 
C) Regulating private banking 
D) Controlling the supply of money

Question 15

__________ is the ease with which an asset, typically money, can be converted into spendable form.

Accepted Answer

A) Speculation 
B) Accountability 
C) Liquidity 
D) Motive 
A) Speculation 
B) Accountability 
C) Liquidity 
D) Motive

Question 16

In the circular flow of money through an economy, the following is considered a leakage:

Accepted Answer

A) Consumer expenditure 
B) Bank interest 
C) Consumer saving 
D) Wages paid to workers 
A) Consumer expenditure 
B) Bank interest 
C) Consumer saving 
D) Wages paid to workers

Question 17

Which of the following is the term for the economic indicator that measures change in price over time, using a fixed market basket of average services and goods?

Accepted Answer

A) Phillip's Curve 
B) CPI 
C) MPC 
D) GDP 
A) Phillip's Curve 
B) CPI 
C) MPC 
D) GDP

Question 18

What states that as the price of a product rises, people purchase less of that good, leading to a decrease in demand?

Accepted Answer

A) Law of supply 
B) Command economy 
C) Law of demand 
D) Law of increasing opportunity costs 
A) Law of supply 
B) Command economy 
C) Law of demand 
D) Law of increasing opportunity costs

Question 19

What term refers to a general right shift in the AS curve, meaning that the supply of all services and goods is increasing?

Accepted Answer

A) Long-run AS curve 
B) Positive supply shock 
C) Stagflation 
D) Speculative motive 
A) Long-run AS curve 
B) Positive supply shock 
C) Stagflation 
D) Speculative motive

Question 20

Julia is currently on maternity leave from her position at La Gourmande Francaise. Is Julia considered to be employed or unemployed?

Accepted Answer

A) Employed 
B) Unemployed 
A) Employed 
B) Unemployed

Exam 30: (AP) Macroeconomics: Part A

What is the correct term for an inflation caused by a decrease in AS and accompanied by a decrease in employment and real output?

The medium run aggregate supply (MRAS) is affected by labor, capital availability, technological capability, and wage rate.

One of the limitations of GDP indices is that they do not take ________ into account.

What is the depreciation of the dollar most likely to do?

Why does specialization lead to increased output of products?

All of the following are approaches to calculate a country's GDP except:

What is the name for the special account that is used to make sure that the two sides of the BOP really do balance?

If the MPC is 0.7, what is the marginal propensity to save? A))5 B))1 C))3 D)None of the above

True or False: Having a fractional reserve banking system means that the central bank holds a specific fraction of GDP on reserve at all times.

What is the correct formula for the money multiplier? A)(Required reserve ratio)/(total variable cost) B)[1 (required reserve ratio)]/(marginal cost) C)[1-(MPC)]/required reserve ratio D)1/(required reserve ratio)

Which of the following is the correct term for the simple act of giving one thing up for another?

If a government devises a plan to increase the amount of money that is spent on national infrastructure like bridges and roads, what is this called?

When calculating unemployment figures in a given population, economists count those:

The Federal Reserve is a private institution that was authorized by the United States government in the early 20th century to regulate the quantity of money in the economy. The following are the functions of the Federal Reserve except:

__________ is the ease with which an asset, typically money, can be converted into spendable form.

In the circular flow of money through an economy, the following is considered a leakage:

Which of the following is the term for the economic indicator that measures change in price over time, using a fixed market basket of average services and goods?

What states that as the price of a product rises, people purchase less of that good, leading to a decrease in demand?

What term refers to a general right shift in the AS curve, meaning that the supply of all services and goods is increasing?

Julia is currently on maternity leave from her position at La Gourmande Francaise. Is Julia considered to be employed or unemployed?

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